ECONOMY

Belgium’s KBC to limit Iran transactions after US sanctions move

Iranian and US banknotes are on display at a currency exchange shop in downtown Tehran, Iran. (AP)

Belgium’s KBC will limit Iran-related transactions to only humanitarian trade after the US decision to reimpose sanctions on Tehran, the financial group said, becoming the latest company to scale back activities.

US President Donald Trump pulled out of an international nuclear deal with Iran - known as the JCPOA - on May 8 and said he would reimpose sanctions within 180 days, prompting several European companies to announce they would end business with Tehran before the Nov. 4 deadline.

Since then, banks, insurers, shipping companies and European oil refiners have been gradually severing ties with Iran, complicating the efforts of European and other countries to keep the nuclear deal alive.

“Immediately upon the exit by the USA of the JCPOA, KBC Group decided to restrict its policy on Iran to humanitarian goods as defined by OFAC,” the company said in an emailed statement to Reuters, referring to the US Treasury’s sanctions enforcement arm.

“This policy allows also such humanitarian transactions for KBC’s own customers beyond the 4th of November 2018 as long as it complies with OFAC programs.”

KBC said pending transactions for goods other than humanitarian trade would be wound down within the allowed period.

“KBC never financed any deal with Iran but only processed the settlement of transactions of its customers, taking into account all applicable EU and OFAC sanctions and several other specific conditions,” it said.

International sanctions were lifted in 2016 as part of an agreement to limit Iran’s nuclear activity. The easing of measures included the removal of some sanctions by the United States such as on Iran’s financial sector. 

Respecting all EU, US regulations 

KBC, which is an integrated bank-insurance group, said it previously decided in 2016 to support well established customers in home markets in Belgium, the Czech Republic, Slovakia and Hungary “in their genuine trade with Iran, always respecting all EU and US regulations”.

“Such support is/was restricted to non-US dollar trade only and always subject to an in-depth screening of each transaction and all parties concerned.”

Kenni Leth, group press officer with Denmark’s largest lender Danske Bank, said earlier this year the bank
had decided to phase out and exit all activities to and from Iran and suspend existing relations with Iran that allowed it to support certain customers in doing business there.

“During recent months the operational and reputational risks associated with doing business in Iran have increased,” Leth
said.

Last week, Swiss lender Banque de Commerce et de Placements (BCP) told Reuters it had suspended new transactions with Iran and was winding down Iran-related activities, which finance sources said was a blow for Tehran.

Germany’s No.2 lender DZ Bank said last month it would halt financial transactions with Iran in July.

Sanctions specialists say humanitarian business with Iran, which includes the food and medicine trade, was never barred before 2016, but the complexities involved made such activity slow paced due to concerns over dealing with sanctioned entities, together with a ban on US dollar dealings.

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Last Update: Thursday, 7 June 2018 KSA 20:35 - GMT 17:35
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